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Thoughts about the relationships between transport and the urban area it serves

Posts Tagged ‘LNG

70 PERCENT OF OIL & GAS COMPANIES STILL FAIL TO ADEQUATELY DISCLOSE RISKS TO INVESTORS

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This post is comprised of information that came into my email inbox as a press release. Regular readers of this blog will know that I have been increasingly critical of Christy Clark’s claims about LNG and how it is a “cleaner” fuel than coal. The problem is that fracking for gas releases a lot of methane – a far more powerful greenhouse gas than CO2 – and the companies responsible for that are less than forthcoming about how large the problem is.

Since a few, no doubt industry sponsored, trolls now pop up whenever I mention fracking, I thought I would let them have something to chew on. You, of course, have already divested from fossil fuels, so you don’t really need this.

 

BOSTON, MA///December 17, 2015///The 2015 edition of an annual investor scorecard ranking the 30 largest oil and gas companies engaged in hydraulic fracturing, or “fracking,” finds improved risk disclosure by a few companies, even as 70 percent of the energy companies continue to get failing marks.

Available online at www.disclosingthefacts.org, the third annual Disclosing the Facts report from As You Sow, Boston Common Asset Management, and the Investor Environmental Health Network (IEHN) gauges how well the oil and gas companies do in providing information so that investors can accurately assess how, or whether, these companies manage key risks of fracking, including use of toxic chemicals, water consumption and water quality, waste management, air emissions, methane leakage, and community impacts.

Eight oil and gas companies made substantial progress in their 2015 disclosures, spurred in part by the earlier scorecards as well as by shareholder engagements involving a wide range of investors. BHP Billiton emerged as the highest-scoring company for the second year in a row — almost doubling its 2014 score from 18 to 32 points, out of a possible 39 points. Hess (2nd), Apache (3rd), and Noble (tied for 4th) built on their leadership positions from 2014, disclosing information for about half of the scorecard indicators. Also tied for fourth, CONSOL nearly quadrupled its 2014 score, jumping from five to 19 points by securing third-party certification for compliance with the best practice standards of the Center for Sustainable Shale Development.

In addition to the top five companies, three other companies — Southwestern Energy Co. (6th), Anadarko Petroleum Corp. (tied for 7th), and QEP Resources, Inc. (tied for 7th) — made substantial gains in 2015.

Exxon Mobil, the largest of the companies scored, earned 4 points, placing it in the bottom third of the industry.

The new report also scores companies on their disclosure of methane leakage, a key concern because methane is far more potent a greenhouse gas than carbon dioxide (CO2). For the second year in a row, most companies failed to disclose their methane leakage rate or how often they monitor for leakage. In 2015, just five of 30 companies disclosed their methane emission rates from drilling and other operations. Not a single company reported establishing public methane emission reduction goals.

“The results of the 2015 scorecard show that corporate disclosure efforts have increased among a core group of industry leaders, despite enormous financial write-offs by the industry,” said Richard Liroff, executive director of IEHN. “A handful of companies have clearly responded and risen to our challenge. Unfortunately, reporting on many of the key metrics is still absent for most companies, making it difficult for investors and the public to assess and compare performance. Methane reporting, in particular, is almost non-existent among the companies we surveyed.”

“It is encouraging to see a new company—CONSOL– jumping into the top five in this year’s scorecard. But we need to see a bigger commitment from the industry in general,” said Danielle Fugere, president of As You Sow. “While progress has been made, companies must improve their local disclosures — their social license to operate is often determined by local concerns such as land and water use, air and water pollution, and nuisances such as noise, light pollution, traffic, and road damage.”

“The report shows that several good practices are becoming more widespread. We see companies continue to pursue operating innovations that not only save money but also yield environmental benefits. These include, for example, substituting pipelines for trucks to move water and waste water, enhancing leak detection and repair efforts, and using less, but safer and more cost-effective chemicals,” said Steven Heim, managing director of Boston Common Asset Management. “Absent greater disclosure on things like methane, other air emissions, and growing concerns around induced seismicity, investors have no way of crediting those companies making meaningful efforts to adopt best practices and mitigate their impacts on communities and the environment.”

This 2015 scorecard benchmarks the public disclosures of 30 companies on 39 key performance indicators. It distinguishes companies disclosing more about practices and impacts from those disclosing less. The scorecard assesses five areas of environmental, social, and governance metrics emphasizing, on a play-by-play basis, quantitative disclosures for: (1) toxic chemicals; (2) water and waste management; (3) air emissions; (4) community impacts; and (5) management accountability. It relies solely on publicly available information companies provide on their websites or in corporate financial statements or other reports linked from their websites.

The five most widely reported indicators include: substituting pipelines for trucks to transport water for fracturing (23 companies); declaring a practice to use non-potable water instead of fresh water for fracturing whenever feasible (19 companies); avoiding use of diesel fuel in hydraulic fracturing fluids (16 companies); relying on independent third-party databases to screen potential contractors (16 companies); and linking compensation of senior management to health, safety, and environment metrics (15 companies).

The complete ranking of the 30 companies is as follows:

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COMPANY*                                   SCORE (OUT OF POSSIBLE 39 POINTS)**

Company and Ticker Symbol 2015 Score 2014 Score
BHP Billiton Ltd. (BHP) 32 18
Hess Corp. (HES) 21 17
Apache Corp. (APA) 20 13
Noble Energy, Inc. (NBL) 19 13
CONSOL Energy Inc. (CNX) 19 5
Southwestern Energy Co. (SWN) 16 2
Anadarko Petroleum Corp. (APC) 15 8
QEP Resources, Inc. (QEP) 15 1
EQT Corp. (EQT) 14 16
ConocoPhillips Corp. (COP) 11 5
Range Resources Corp. (RRC) 11 9
Royal Dutch Shell plc (RDS) 11 9
Occidental Petroleum Corp. (OXY) 10 7
Penn Virginia Corp. (PVA) 10 9
BP plc (BP) 8 6
Cabot Oil & Gas Corp. (COG) 8 8
Encana Corp. (ECA) 8 15
EOG Resources, Inc. (EOG) 8 9
Exco Resources, Inc. (XCO) 7 7
Devon Energy Corp. (DVN) 7 5
Newfield Exploration Co. (NFX) 6 4
Chesapeake Energy Corp. (CHK) 4 7
Chevron Corp. (CVX) 4 6
Exxon Mobil Corp. (XOM) 4 5
Pioneer Natural Resources Co.* (PXD) 3
Ultra Petroleum Corp. (UPL) 3 9
WPX Energy, Inc. (WPX) 3 3
Continental Resources, Inc. (CLR) 2 2
Whiting Petroleum Corp. (WLL) 2 3
Carrizo Oil & Gas, Inc. (CRZO) 0 0

*For the 2015 scorecard, Pioneer Natural Resources was substituted for Talisman Energy, Inc., which was acquired by Repsol, S.A. **2014’s scorecard had a total of 35 possible points.

The three most significant scoring changes on indicators between 2014 and 2015 were for: play-by-play reporting of the types of water sources used for fracturing activities (from one to six companies); percentages of wastewater reused for fracturing (from two to seven); and addressing naturally occurring radioactive materials (NORMs) (from six to 12).

ABOUT THE GROUPS

As You Sow (http://www.asyousow.org/) promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies. Its efforts create large-scale systemic change by establishing sustainable and equitable corporate practices.

Boston Common Asset Management, LLC (http://www.bostoncommonasset.com/) is a sustainable investment firm dedicated to generating competitive financial returns and meaningful improvements in corporate performance on environmental, social, and governance (ESG) issues. We are long-term investors. We believe that markets typically misvalue the timing and magnitude of risks and opportunities presented by ESG factors. Therefore, our investment strategy is to build and grow diversified portfolios using the high-quality but undervalued sustainable stocks that our integrated investment research identifies. As part of this, we look to add value through targeted company and industry engagement efforts.

The Investor Environmental Health Network (http://www.iehn.org) is a collaborative partnership of investment managers and advisors concerned about the impact of corporate practices on environmental health.

Written by Stephen Rees

December 17, 2015 at 11:23 am

Posted in energy, greenhouse gas reduction

Tagged with ,

The Cost of Energy

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The recent IPCC report has been very clear about the need to get out of fossil fuels. They are also realistic in predicting that it is going to take a while to turn things around. What surprises me is the continued reluctance of the elite to absorb the message – but maybe there is an easier way to get across to them.

There has already been a significant change in energy markets, not just because the price of renewables (solar, wind and so on) has been dropping rapidly. The rush into fracking for oil and gas in North America has depressed oil prices.

Screen Shot 2014-11-04 at 8.10.26 AMNow it may be argued that this is merely short term volatility and that OPEC could cut back its output to prop up prices. But equally, OPEC may be getting concerned about losing market share and needing to protect its revenue stream. Sales at lower prices being better than no sales at all.

I have already been arguing in other fora – such as twitter and facebook – that the dropping oil price ought to be a much bigger consideration for opponents of increasing fossil fuel dependence. The current crop of LNG projects in BC seem to me to be the most obvious candidates. British Gas has already pulled out of Prince Rupert: can Squamish be far behind? The provincial government has already dropped its revenue estimates, even though it was already willing to pretty much give away the resources through low royalties, it has recently cut the tax regime too. I do not understand why they continue to pursue projects which offer very little in terms of employment (relative to other energy opportunities) and now little revenue, especially in the near term. “British Columbia’s auditor general says doing business with the oil-and-gas industry has cost the province’s coffers about $1.25 billion in royalties even before most of the product has been pulled from the ground.” Vancouver Sun

But the pipeline projects that are essential to expanding the tar sands and getting diluted bitumen to oil refineries also  seem to be not only deservedly unpopular, but increasingly unnecessary. The tar sands are already heavily subsidized, but even so “ninety percent of future oil sands projects at risk from eroding oil price” according to a new report from Carbon Tracker.

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I have long argued that the only thing to do with difficult to extract fossil fuels is to leave them in the ground. For one thing it is now clear that we have more than enough geothermal energy resources available to meet all our needs. While not strictly speaking “renewable” it is not likely that the earth’s core is going to cool down rapidly if we exploit these resources anymore than putting up solar panels to capture sunlight risks dimming the sun. The good thing about geothermal is its constant availability which makes it really useful to provide power when sunlight and winds are not available.

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The problematic thing is that transportation, especially in North America, is still heavily dependant on energy dense liquid fuel. Even though batteries are getting better, and energy efficiency improvements such as hybrids are helping reduce demand for gasoline, much more attention is being directed – quite properly – to the fall in car use. I think that is much more to do with the falling buying power of consumers than secular change in transport demand. The grab of the 1% has gone much too far, and the economic impacts of the impoverishment of the rest of the population are now becoming more apparent. So far the knock on effects into social unrest have been relatively weak, but that cannot continue indefinitely, absent a change in policy direction from most national governments. Obviously austerity is not working and cannot work. The changes in mode to walking and cycling can be achieved in some urban areas, but in most suburbs significant shifts in land use are needed to put origins and destinations in better proximity.  That is going to take some time to achieve.

Politicians Discussing Global Warming

Written by Stephen Rees

November 4, 2014 at 9:24 am

The Natural Gas System is Leaky and in Need of a Fix

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The first thorough comparison of evidence for natural gas system leaks confirms that organizations including the Environmental Protection Agency (EPA) have underestimated U.S. methane emissions generally, as well as those from the natural gas industry specifically.

That’s a really neat summary of a new study from Stanford. The mainstream media is reporting this – often behind paywalls – so the link I have posted is to the original not them. It also seems that they have decided the story is to be about buses. That’s in the report but a ways down

the analysis finds that powering trucks and buses with natural gas instead of diesel fuel probably makes the globe warmer, because diesel engines are relatively clean. For natural gas to beat diesel, the gas industry would have to be less leaky than the EPA’s current estimate, which the new analysis also finds quite improbable.

“Fueling trucks and buses with natural gas may help local air quality and reduce oil imports, but it is not likely to reduce greenhouse gas emissions. Even running passenger cars on natural gas instead of gasoline is probably on the borderline in terms of climate,” Brandt said.

At first this was the item that made me think I should blog about it. I have long been critical of the way that in BC we have glommed onto to NG as an alternative transportation fuel and have so often found it wanting. I won’t repeat that here.

What struck me was much closer to the top of the story

Natural gas consists predominantly of methane. Even small leaks from the natural gas system are important because methane is a potent greenhouse gas – about 30 times more potent than carbon dioxide. A study, “Methane Leakage from North American Natural Gas Systems,” published in the Feb. 14 issue of the journal Science, synthesizes diverse findings from more than 200 studies ranging in scope from local gas processing plants to total emissions from the United States and Canada. [emphasis added]

“People who go out and actually measure methane pretty consistently find more emissions than we expect,” said the lead author of the new analysis, Adam Brandt, an assistant professor of energy resources engineering at Stanford University. “Atmospheric tests covering the entire country indicate emissions around 50 percent more than EPA estimates,” said Brandt. “And that’s a moderate estimate.”

So instead of me ranting about buses I am going after the more significant target. Our Premier’s obsession with LNG, and how this is going to be both our fiscal salvation – and will help other countries wean themselves off dirtier fuels like coal.

The problem with natural gas – methane – is that is far more powerful as a greenhouse gas than CO2. As noted above “30 times more potent than carbon dioxide” which means while burning methane is cleaner than burning coal, if just small amounts leak unburned then the advantage in terms of impact on climate is negated. Since the leaks have been underestimated up to now, that means we now need to rethink some of our strategies. I think it is very common for the people who promote fracking to downplay the destructiveness and carelessness of their activities. So the phrase “some recent studies showing very high methane emissions in regions with considerable natural gas infrastructure” is striking even though in context it is stressed that these levels are not characteristic of the continent as whole. The frackers keep secret the chemicals they add into the water – and deny that these chemicals damage the water supply of people downstream. Rather like the way the tarsand developers prefer us to not pay attention to what happens to the water supply people who live near the operations depend on.

Even though the gas system is almost certainly leakier than previously thought, generating electricity by burning gas rather than coal still reduces the total greenhouse effect over 100 years, the new analysis shows. Not only does burning coal release an enormous amount of carbon dioxide, mining it releases methane.

But I do not think that justifies a strategy that throws LNG in as the be-all and end-all. Recent developments in solar power, for instance, are showing that the competitiveness of this source of electricity has been greatly improved. BC has all sorts of renewable energy sources that remain virtually untouched. Geothermal energy, for instance, seems to be mostly confined to a few spas and hot tubs. Wind and wave energy generally is ignored, despite our location on the shore of the Pacific.

There are also very real doubts about the viability of some of the proposals being floated for LNG plants, which seem to me to based more on wishful thinking than clear headed analysis of the realities of a market place that has recently seen a flood of new production for a product that is difficult to package and transport to market. It is still the case that what I was taught in that CAPP course all new employees of the Ministry of Energy were required to attend, that what comes out of the ground is either oily gas or gassy oil. And what the market demands here is usually liquid fuel, and the gas is flared. About half of the volume produced I’m told. Using lots of energy to liquify the gas and then ship it around the planet to be sold at competitive prices to places that can pipe gas in from much closer locations does not seem very likely to be viable.

But mostly I am very tired of this administration pretending to care about the climate (because we had the carbon tax implemented before other places) while doing their very best to undermine the limited success we have had in reducing our own ghg. Which may not be entirely due to good management but simply reduced levels of economic activity.

Adrian Dix Leaving Good News for Greens

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I must admit I was a bit surprised by the announcement yesterday that he was stepping down – as soon as they can find a new leader. I expected him to soldier on, especially since his caucus had been so quiet.  He is speaking at UBCM as I am writing this and the coincidence of a couple of tweets  inspired this post

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The link on the image won’t work so here it is in working condition Insight West Poll on Fracking 

He is also reported to be trying to distinguish NDP on LNG from BC Liberals on LNG, but the point is that LNG is a fossil fuel that has to stay in the ground. For one thing gas extraction always leads to leaks of methane, and that is a far more powerful gas than carbon dioxide. But secondly it is not a “transition fuel” as the industry claims. It is a fuel that locks in existing technologies and thus slows the introduction of renewable sources of energy and also slows the introduction of greater energy efficiency. But the really important linkage is that these LNG plants rely on fracked gas. There is no way that conventional gas wells can produce more – most are in decline, and the new resources being discovered are now nearly all “tight gas” requiring fracking. And the opposition to fracking is based on concerns about local environmental impacts – especially the effect on water supplies – rather than understanding the ghg implications of its development. The gas industry has been very clever to emphasize how “clean” gas is, without making clear what they are comparing it to. Probably coal.

The Green Party on the other hand has made its position clear “economic suicide”  and “a pipe dream“. While Dix and the NDP would like to present themselves as defenders of the environment, they cannot do that credibly while supporting expansion of fossil fuel extraction for export.

It has also caught my eye that Thomas Mulcair the leader of the NDP nationally is not in favour of increasing taxes on the super-rich.  Which suggests to me that he is really out of touch with the roots of the NDP and the need for far greater equality. Although other NDP members do not agree with him. It reminds me forcefully of the conversation I had with Geoff Meggs just before the provincial election, when he said the NDP if elected would not be raising provincial income tax rates for the wealthy. (Meggs bio on the Vancouver City web site does not mention his NDP link directly but does say “He served as Director of Communications in the Office of the Premier under Premier Glen Clark, and later served as Director of Communications and Executive Director of the BC Federation of Labour.”)

Just in case you have not read them here are our Ten Core Principles, which all Greens adhere to.  Sustainability and social justice are numbers 1 and 2 respectively.

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One way to do that would be to abandon LNG entirely and embrace progressive taxation policies. I do not expect either – from Dix or the NDP. If you agree we need both then you should join the Green Party.

Written by Stephen Rees

September 19, 2013 at 9:48 am